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:. Estate Planning

Most people realize the importance of planning for the future. They are aware that state laws are no substitute for carefully deciding how their property should ultimately be distributed. Yet, strange as it may seem, many Americans fail to adequately plan their financial affairs. Among the many reasons, procrastination is the most common.

Another reason is unfamiliarity with procedures involved and how simple they can really be. For many, there is also a reluctance to seek out qualified assistance which may be necessary in preparing the best plan.

The only document many people need to fulfill their wishes is a well-written will.

Most states accept “homemade” wills, but the laws of probate and estate taxation are complex, and minor errors can result in needless delays and expense.

For this reason, it is usually wise to seek professional assistance. Most of us turn to attorneys to help in drafting a will. The laws of each state are different, so it is best to seek out someone who is well-trained in the laws of your state. A qualified attorney can help reduce taxes which may be due, and help maximize the amount your heirs will receive.

If you do not have an attorney, ask friends or relatives for suggestions. Feel free to discuss fees with the attorney in advance. The cost of drafting most wills is relatively minor and may be recovered many times over in reduced taxes and estate settlement costs.

Before visiting an attorney, you can take a few simple steps which often reduce the time and expense involved. Take the time to carefully list the “Four P's” of estate planning.

Persons Property
The people in your life are the best reason to plan. List those hwom you feel responsible and would like to leave income and/or assets. This might include a spouse, children, parents, brothers, sisters, friends, charitable organizations or institutions, or other. Be sure to include full names, ages, and addresses. Make a list of all your assets. Include mortgages and other debts to arrive at a true picture of your net worth. This can be important in estimating tax liability, if any.
Plans Planners
Planning your estate involves matching the people in your life with the properties you wish them to receive. Make a list of what you would like to accomplish for each person.

Pay special attention to timing as well as amounts. This can be very important when thinking of younger persons. In some cases you may wish to delay receipt of property, or pay income only to someone for a period of time before they receive the property itself.

Often is is decided to provide for an heir on a temporary basis. At the end of that period, the property is put to other uses (to fulfill charitable purposes, for example). Your attorney will help you make plans and meet your objectives as economically and efficiently as possible. Many different objectives may be met through your will.		 Make a list of persons other than your attorney on whom you rely for financial advice. Such a list might include a banker, an accountant, a life insurance professional, stockbroker, or other financial planners. Your attorney can act as the coordinator and drafter of your plan, but others are often involved in completing the picture. Your attorney will consult with others about insurance coverage, ownership of properties, and other details.

After doing your “homework” the next step is to meet with your attorney and review your outline of persons, property, plans and planners. Be frank in discussing your feelings and motivations. Discussions with your attorney are entirely confidential. It can sometimes be easier to sort our your wishes with the advice and counsel of an outside party.

After this initial review, your attorney will be able to give you a realistic estimate of the amount of time and expense involved in your plan. You will also be shown the state and gift taxes that may be saved, and other expenses the plan will reduce. You can make an intelligent decision regarding costs and benefits to be gained before proceeding. Many are pleasantly surprised at how economical the planning of a will can be.

After your attorney has drafted a will that accomplishes your wishes, another meeting will be arranged to review its content. Minor changes are sometimes made at this point. When you have approved the final language, you will be asked to sign your will before witnesses. Witnesses are usually younger than you, and it is not necessary that they know you. After signing your will, you will be given a copy for your records. Many ask their attorney to store the original for safekeeping.

Make a practice of reviewing your will and other estate documents on a regular basis. Among other things, the following events may alert you to the possible need to update your plans:
  • A move to a new state. The laws governing wills and trusts vary. For this reason, your will should usually be revised when you move to another state.
  • A change in marital status. If you marry, become widowed, or experience other changes in your marital status, it is almost always wise to review your financial and estate plans.
  • Birth of children or grandchildren. You may wish to change your plans to reflect new additions to your family.
  • Changes in wealth. If your assets have greatly increased or decreased, you may need to ad provisions or simplify your plan. Your attorney will advise you. Taxation can be more of an issue as your estate grows.
  • Changes in charitable interests. Many persons choose to make gifts to one or more organizations or institutions they have enjoyed supporting. Any interests that change should be reflected in estate plans.
  • Changes in estate and gift tax laws. Generous provisions enacted by Congress in 1981 are now fully effective. Later reforms may affect transfers to grandchildren and certain other relatives. Failure to adjust your plans may result in unnecessary taxes.
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